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Share allotment is a smart move for any Indian company, whether you’re onboarding new investors or rolling out ESOPs. You can’t just hand out shares; everything has to line up with the Companies Act, 2013. If you miss any step, you will have to face compliance fines. The Startup Lab lays out the entire process, from sorting out the paperwork to making sure that the PAS-3 filing is handled properly.
What is Share Allotment?
Share allotment refers to the formal process of issuing shares to shareholders after receiving share application money. The board of directors need to agree and sign the overall process and report it to the ROC via the PAS-3 form.
Full Process of Share Allotment Process in India
1. Board Resolution
First, schedule a board meeting and make it official. Then the board has to finalise the share allotment.
2. Valuation Report
If you’re bringing in a new shareholder or arranging a private deal, you really need a formal valuation from a certified professional.
3. Offer Letter (if needed)
For private placements or rights issues, you’re expected to send out offer letters in the given format.
4. Receipt of Share Application Money
You have to verify that the money is actually credited in your company’s bank account before going to the next step.
5. Allotment of Shares
When the funds come into the account, it’s time to call another board meeting. In this meeting, the board will agree and give the share allotment to the assigned person.
6. Filing PAS-3 with ROC
You get a tight deadline of just 15 days from the allotment date to submit the Form PAS-3 to the ROC. So mark your calendar.
7. Issue Share Certificates
Now, you have only 60 days from the date of allotment to get those share certificates into the hands of the allottees.
Timelines & Compliance
- You need at least 15 days to fill out the PAS-3 form.
- The last date to pass on the share certificates is only 2 months.
- Any delay can lead to huge fines and penalties from the ROC.
Common Mistakes to Avoid
Missing the PAS-3 filing deadline
Issuing shares without getting a proper valuation in place.
Delaying the increase of authorised capital when it’s clearly needed.
Overlooking offer letter requirements—definitely not something you want on your compliance checklist
Documents Required
- Board resolution
- List of allottees
- Valuation report
- Bank statement showing application money
- Offer letters (if applicable)
- Form PAS-3
FAQs
Share allotment is a simple act of a company issuing fresh shares, whereas share transfer is simply the passing of current shares from one shareholder to another.
Form PAS-3 is the main form to be filled out for the return of allotment.
Yes, mentioned in FEMA and RBI regulations.
Why Choose The Startup Lab?
- We offer PAN-India ROC compliance and documentation support
- We have helped more than 1000 startups with allotments
- Our team has expertise in valuation, capital structuring, and filings
Need help with your company’s share allotment? Contact us to begin.
Testimonials
Our Happy Customers
I want to thank the entire team at StartupLab, especially their incredible founder, Ms. Shruti Aggarwal, for the fantastic job they did in completing our international company registration. The process had its challenges, but their constant support in all aspects of company registration and operations made it so much smoother.
If you're looking to register a company in India from abroad, I highly recommend reaching out to StartupLab for their company registration services, consultancy, and accounting support. Choosing them was one of the best decisions we made!
If you're looking to register a company in India from abroad, I highly recommend reaching out to StartupLab for their company registration services, consultancy, and accounting support. Choosing them was one of the best decisions we made!
The internship was very fun... We got to learn lot of things and most importantly the instructors were very supportive.
It's rare to see a team working this professionnal in every department..
My llp registration was completed by them, and a buddy suggested them because he had registered a corporation with them... it was a pleasant process. Everything was spot on... and there was excellent time management.
They have done my llp resgistration and my friend recommended me because he had registered a company from them... it was a nice experience. everything was on point... and a nice time management.
The support that this team has provided me throughout is commendable. Guidance at each step at anytime, with a polite tone and smile on the face is praiseworthy.
Thank-you guys!
Kudos to your entire team!!
Thank-you guys!
Kudos to your entire team!!
